Unum released its first quarter earnings report today, including a rise in operating income.
After-tax operating income was $225.7 million, or 87 cents per share, a 4.7 percent improvement over the $215.6 million, or 80 cents per share, Unum earned in the first quarter of 2013. Net income was $228.9 million, or 88 cents per share, compared to net income of $212.6 million, or 79 cents per share, for the first quarter of 2013.
Details are in the attached earnings announcement, including a reconciliation of non-GAAP financial measures, but here are some highlights from the quarter:
- Operating income for Unum US rose slightly to $210.8 million.
Results this quarter were driven by favorable performance in the group life and voluntary lines of business. Sales increased by 7.2 percent in the quarter, with the pipeline looking into the second quarter encouraging as well.
- Unum UK operating income increased 9 percent to £22 million ($36.5 million) as the business continues to make good progress in the re-pricing and repositioning of its group life business. While total sales were down slightly due to the pricing actions in the group life business, group disability sales increased 5.7 percent.
- Colonial Life generated one of its strongest quarters with operating income increasing 5.3 percent to $79.4 million. These solid results were driven by strong risk results and premium growth. Led by strong commercial market activity, sales increased 6.5 percent with solid momentum in this business as well.
- The performance of the Closed Block was again in line with expectations, with operating income of $29.1 million.
- The company’s investment portfolio "remains in excellent shape and maintains very solid credit quality. The company is facing a very difficult interest rate environment, however, and holding on to more cash than normal as it looks for better opportunities to invest its capital."
Lastly, the company’s capital position remains quite strong and continues to give Unum significant financial flexibility. The company bought back another $100 million of its stock during the quarter and has now repurchased shares in 15 of the last 16 quarters – a record few in this industry can match.